One of the most closely watched transactions in the financial landscape has been closed: BBVA's bid for Banco Sabadell has failed to go ahead after achieving only 25,33% of the capital (25,47% of the voting rights), figures insufficient for the operation to succeed. This outcome confirms the results of the takeover bid.
The supervisor announced the outcome on Thursday night (after the deadline indicated in the last day to attend the takeover bid) and made it clear that, as the 30% threshold is not reachedThe proposal automatically declines. Sabadell will continue on its own, and BBVA is making moves to refocus its strategy and compensation policy.
Results and offer thresholds
The Basque bank initially set as its objective exceed 50% of the capitalLater, he left open the possibility of accepting a range between 30% and 50% and then making a second cash offer at a fair price. None of this will be possible because acceptance fell below 30%.
The proposed exchange ratio —One new BBVA share for every 4,8376 Sabadell shares— becomes void. Acceptances submitted cease to be valid, and the costs of pursuing the offer are borne by the offeror, in line with takeover bid regulations.
The result was announced one day ahead of schedule, with the CNMV certifying that the minimum limit was not reached set by BBVA itself in its prospectus. Furthermore, the legislation prohibits a similar transaction involving the same company for at least one year.
The market was expecting a move between 30% and 50%. The bank attributes part of the outcome to the “confusion” over a possible second offer, an expectation that did not materialize and that would have conditioned certain investors, according to analysis of takeover bids and rumors.
BBVA turns the page: remuneration and strategic plan
The entity has announced that quickly reactivates its shareholder remuneration: On October 31, it will launch the pending share buyback for €1.000 billion and on November 7, it will pay an interim dividend of €0,32 per share (around €1.800 billion in total). The measure reopens the debate on be at Banco Santander or BBVA.
BBVA also plans to launch a “significant” additional buyback as soon as it obtains the authorization of the European Central Bank and coexists with the effects of the US rate hike. In parallel, it maintains the objectives of the 2025-2028 plan: accumulated profit close to 48.000 billion euros, up to 36.000 billion euros to reward shareholders - with about 13.000 billion euros in the short term - and ROTE around 22% with a significant improvement in efficiency.
The elimination of uncertainty about a second takeover bid and the remuneration roadmap boosted the bank's share price in Wall Street, with increases of more than 7% after the result was known.
From the executive leadership, Carlos Torres and Onur Genç have reiterated their confidence in the solo project and on the path of growth and profitability without integration with Sabadell, leaving behind an operation that has marked the last year and a half.
Sabadell comes out stronger and the board moves
The management of Sabadell, with Josep Oliu and César González-Bueno At the front, it emerges strengthened in its thesis that the Catalan bank creates more value on its own than by accepting the BBVA swap. The retail core, key due to its weight, barely attended: only a 2,8% of client-shareholders accepted, equivalent to about 1,1% of the capital.
Although some institutional investors had slipped their support, the result shows that their support was less than expectedIndex funds—about 20% of the shareholding—acted cautiously, and political and regulatory opposition also weighed in: the Government conditioned the operation on maintaining operational autonomy for 3 years (extendable to 5), a requirement that curtailed potential synergies.
In the middle of the process, Sabadell agreed to the sale of TSB to Banco Santander and announced a macro-dividend of 2.500 billion euros, in addition to a commitment to significant remuneration in the short and medium term. With the focus now on Spain, the market will closely monitor whether the bank maintains benefit and payment levels after his Numantian defense of independence.
At the corporate governance level, the investor and director David Martinez —approximately 4% of the capital—accepted the offer against the majority opinion of the board. Its continued presence on the board and the eventual management of its position will be matters to be monitored due to their potential impact on the share price.
The major reference shareholders in both banks, such as BlackRock, retain their status after the takeover fiasco. With the swaps rendered null and void, the titles return to their owners and there are no shareholder changes resulting from the failed operation.
After 17 months of business negotiations and an exhaustive regulatory analysis, BBVA's hostile bid has fizzled out without meeting the minimum threshold. For the Basque bank, a cycle of accelerated execution of its organic and remuneration plan; for Sabadell, the validation of the independent project poses opportunities and challenges in a banking landscape that continues to open the door to corporate movements, preferably friendly ones. Investors can consult the best banks in Spain.
